Industrial production steeply shrank by 16.7 per cent in the month of March, which was the sharpest contraction on-record.
With the commencement of nationwide lockdown from March 25 due to the coronavirus pandemic, the factory output steeply shrank by 16.7 per cent in the month of March, which was the sharpest contraction in IIP on-record. The freefall in the industrial production is observed due to the complete shut down of non-essential industrial activities in the last week of the month. A major decline in the IIP in March took place immediately after the seven-month high IIP growth of 4.5 per cent in February 2020. The manufacturing production also shrank by 20.6 per cent in March, according to the Ministry of Statistics and Programme Implementation. While electricity contracted by 6.8 per cent in the month, mining did not show any movement. With the final figures of March, the industrial production contracted by 0.7 per cent in the full year FY20.
The manufacture of food products shrank by 10.5 per cent; textile by 13.1 per cent; basic metals by 18.6 per cent; and motor vehicles, trailers and semi-trailers shrank by 49.6 per cent in the month of March. Before March, the IIP shrank in the three months to October 2019 due to a prolonged economic slowdown in the country. Ironically, the situation in the month of April also does not appear any brighter as the manufacturing PMI tumbled to 27.4 in April 2020 from 51.8 in the previous month, indicating the lowest level of business sentiment on-record.
Meanwhile, to boost the factory output after a continued phase of industrial slowdown, state governments are regularly revisiting their labour laws. While Yogi Adityanath-led UP government has suspended all labour laws, except three laws and a provision, for the next three years, Shivraj Singh Chouhan’s-led Madhya Pradesh government has also brought major changes in the permitted working hours and other provisions. Similarly, many other states including Gujarat, Rajasthan, etc have also taken steps in this direction with the aim to kickstart their economic activities.